Analyzing workforce development services in Wisconsin

Wisconsin’s workforce development system is comprised of a broad range of employment and training services, from job search and placement assistance to vocational rehabilitation for individuals with disabilities. The Forum’s latest report – commissioned by the Wisconsin Department of Workforce Development (DWD) – offers policymakers and service providers a view of the system as a whole, including the variety of state and federal funding sources that support workforce development programs in Wisconsin. The report also provides analysis of the trends affecting the state’s workforce development system and offers observations on ways the system may be improved.

Key findings from the report include the following:

While it appears that some consolidation of employment and training funding has occurred in recent years, Wisconsin’s workforce development system remains somewhat fragmented. Overall, nine state departments will receive $407 million in federal and state funding in fiscal year 2012 to offer 36 programs that provide employment and training services. While many programs provide distinct services that target specific populations, state policymakers should consider whether the current structure is the most effective and efficient way to organize these services.

Projected changes in Wisconsin’s workforce and economy may demand increased attention to workforce attraction and retention as well as enhanced emphasis on worker training and education. Over the next 20 years, Wisconsin must address a projected decline in the size of its workforce while ensuring that workers have the training required for jobs that are expected to become available. According to DWD estimates, of the 78,570 projected annual job openings between 2008 and 2018, approximately 60% will require some form of “training” while 37% will require a formal degree. An important question for Wisconsin policymakers is whether the current array of workforce development programs and services is appropriately calibrated to meet the state’s evolving workforce needs, particularly in the areas of skills training and education.

The vast majority of funds supporting Wisconsin’s workforce development system are from federal sources, a trend that may not bode well for the future. The federal government will provide 92% of the funding that supports Wisconsin’s workforce development system in fiscal year 2012, an increase from 88% in 2008. This increase is largely attributable to the lingering national recession, which expanded enrollment for Wisconsin’s W-2 program and brought about a federal stimulus package that included additional support for workforce development programs.

Wisconsin’s acute dependence on federal support may not be sustainable or desirable because of the many restrictions typically attached to federal funds and because of the intense fiscal pressures facing the federal government, which place all federal discretionary funding at budgetary risk. In addition, federal funding for workforce development programs has been decreasing over the long term; the overall budgets for the six largest workforce development programs in Wisconsin have declined from a collective total of approximately $430 million in 2000 to $299 million in 2012.

Some new approaches to structuring workforce programs and diversifying funding sources have been initiated in Wisconsin, and those efforts should continue. For example, despite declining federal Workforce Investment Act allocations, the Milwaukee Area Workforce Investment Board has been able to increase its annual revenue, largely by diversifying its revenue sources. Also, the Milwaukee Area Workforce Funding Alliance (MAWFA), which was established in 2009, may serve as another model for cities and regions looking for additional funding streams to support workforce development programs. MAWFA is a consortium of private and public workforce development funders and service providers in the Milwaukee area that helps to coordinate the distribution of funding from private and public funders for local workforce development efforts.

We hope this report can serve as a guide in ongoing efforts to improve the effectiveness of Wisconsin's workforce development system.